by eugene

An Interesting Reversal

Seagate today announced that it was immediately backing all of its internal drives (notebook, ATA, and, of course, SCSI) purchased from June 1st onwards with a 5-year warranty. This reverses a trend where many ATA hard drives had their warranties trimmed down to one-year.

The one-year warranty policy rolled out by manufacturers nearly two years ago caused quite a controversy across the enthusiast community. The common assumption was that financial savings would occur only through denial of claims that would have ostensibly occurred in the second or third year (ATA drives featured 3-year warranties in the past) and thus the new one-year-warranty drives could be made to "be less reliable." This is, of course, faulty logic. Those with an accounting background realize that outstanding warranties on products are considered a liability period, independent of claims. The reduction to a one-year warranty thus provided an immediate shoring of the balance sheet.

Of course, the opposite applies here- Seagate increasing its financial liability by offering such robust protection on its ATA and notebook lines. Though their latest financial statements have been less than rosy, Seagate remains a giant. They can certainly shoulder the change and are likely testing the ability of competitors to do the same.

Now, how do we apply "enthusiast logic" to this development? Is a Barracuda 7200.7 purchased on June 9th, 2004 with a one-year warranty instantly much more reliable due to four more years of suddenly-added coverage? ;P

Seagate's Press Release